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Electricity Prices To Jump Due To Natural Gas Concerns

- 10:56 am - December 19th, 2013


A shortage of capacity in natural gas pipelines serving the Northeast is driving electric rates up throughout southern New England, according to a report in the Hartford Courant.  

In Massachusetts, rates will increase by as much as 38 percent, while customers in Rhode Island and Connecticut can expect increases of 27 percent and 20 percent, respectively. 

Rising demand for natural gas is challenging the region’s supply infrastructure, according to the Courant. “In the past decade, the region’s electric grid has made natural gas its chosen fuel,” the article states. “In 2000, the fuel was used for 15 percent of energy production in New England. Now, it's used for more than half.”

The capacity problems are driving up electric rates at the same time that regional gas utilities are promoting widespread conversions to natural gas heating, even though conversions aggravate the supply shortage and contribute to price increases.

As the region’s reliance on natural gas has increased, many say that investment in the pipelines that feed New England has not kept pace. “Last winter, wholesale electricity prices spiked when an intense cold snap ramped up natural gas demand from homes and businesses that use it for heat,” the Courant reported. “Gas-fired power plants scrambled to acquire the fuel, doing so at high costs that they passed along. That February, the average price for power was $108.25 per megawatt hour, the second-highest monthly price ever.”

The Courant says that “Similar supply shocks are expected to occur again this year, if the same cold conditions return. … The problem with electric prices and winter natural gas use is that it pits heating users against power generators,” the article states. 

Connecticut's energy commissioner, Daniel Esty, told the Courant that he sees the “bump in prices” as “a penalty for decades of inattention to build energy infrastructure.”

To read the Hartford Courant article, click here.

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